General Tommy Franks: a special treat for TGRTA
By Skip Schneider
“We didn't start this thing, but we'll finish it,” retired General Tommy Franks told members of the Texas Good Roads/Transportation Association (TGRTA) at its 73rd annual meeting in Austin July 6-7.
The Texas-reared general who commanded American forces in Afghanistan and Iraq in 2003 was referring to the worldwide war on terror that culminated during his watch as commander in chief of the U. S. Central Command, responsible for watching over two dozen countries in Asia and Africa.
In his straight-talking, often self-deprecating fashion, Franks enthralled his audience with recollections of growing up in Midland, his long military career, and his own ideas about war and freedom.
TGRTA played host to the popular general along with the National Park Foundation and Associated General Contractors of Texas, which brought Franks to Austin.
Franks told his overflow audience of 600 that he is often asked whether the military invention in Afghanistan and Iraq was worth the price we have to pay. His repeated answer: you bet.
"There is something more important than politics - our grand kids and their grand kids,” the general told his appreciative audience.
As he wrote in American Soldier, his 2004 autobiography, “Because the prize we seek in this time of history is a way of life.”
“Freedom is worth whatever it takes. Future generations, I predict, will continue to pay the price for freedom, in this wonderful, this magnificent experiment we call democracy,” Franks wrote.
The general paid tribute to his troops, saying “we are blessed by young people who get out there and do what they were asked to do.”
Legislative changes offer new financing tools to locals
Regional mobility authorities, toll roads, pass-through tolls and infrastructure bank loans are just a few of the innovative transportation financing tools that tantalized and intrigued TGRTA members at their annual meeting.
Some of the terms are 21st century, authorized by Gov. Rick Perry and the Texas Legislature in 2003, refined in House Bill 2702 in 2005, quickly embraced and likely to be dominating in the future.
Perhaps most significant of the changes will be the increased local role in planning, siting, financing, designing and building major highways in the future.
In addition to regional councils established earlier in Dallas and Houston, regional mobility authorities have been set up in Central Texas, San Antonio, Grayson County, Smith County, and the Rio Grande Valley.
Said Bob Daigh, TxDOT's Austin district engineer: “The RMA is how most metropolitan mobility projects will be financed. If you want to take charge of your destiny, the RMA is the way to do it.”
Toll roads will be a major financing tool. “We are undergoing a fight to get the toll system established so that our children and grandchildren can realize the mobility and safety that we so desperately need,” Daigh added.
Mike Heiligenstein, executive director of the Central Texas Regional Mobility Authority (CTRMA), repeated the RMA's benefits - local control, needs determined by the local community, a broad multi-modal ability to respond to regional needs, and faster project development. The enhanced transportation system, he said, creates opportunities for economic development, new jobs and an increased quality of life.
CTRMA, the first RMA, was created in 2002. Construction already is underway on its first project, US 183-A, a toll facility in Cedar Park and Leander north of Austin. It should be completed by March 2007.
Heiligenstein said CTRMA initiated its first senior lien revenues bonds in March 2005 at prices that were the “best in many years.”
Only new capacity will be tolled and non-toll alternatives will be available.
He pointed out that unlike gas and property taxes, tolls offer drivers a choice. “Only those who choose to use the new toll roads will pay.”
Recognizing that not everyone likes toll roads, he added, “You've got to keep hammering the facts…you have got to be able to stick with it.”
Pass-through tolling, explained Amadeo Saenz, Jr., TxDOT's assistant executive director of engineering operations, is a financing mechanism that allows the local entity building and paying for a toll road to be reimbursed from tolls as they are collected.
Grayson and Montgomery counties were the first to use pass-through tolling.
Gerry Pate of Pate Engineers related his experience in guiding Montgomery County through the process. He cited the words of Transportation Commission Chairman Ric Williamson who promised TxDOT was changing its attitude to one of delegating programming authority to local governments: “Our pass-through toll program in effect surrenders a lot of decision-making to regions, counties and even cities.”
James Bass, TxDOT's chief financial officer, said that since pass-through tolling was authorized in 2003, there have been 12 applications for projects worth $789 million and two approvals. The provision covers only state highways.
Under an infrastructure bank loan, TxDOT loans money to the local entity to finance the project and then is reimbursed.
Since the bank was established in 1997, it has loaned $277 million for 57 projects worth $1.9 billion. Bass said 10 loans already have been repaid in full, and forty-four entities have received help.
To date most of the local entities have been cities or counties, but the law allows loans to private entities as well.
The bank is funded with state funds only.
TGRTA honors Transportation Commission
Transportation Commissioner John Johnson praised TGRTA members for their work to improve transportation.
At a dinner honoring the Texas Transportation Commission, Johnson said that when there was difficulty getting things done, “that's where you came in.”
He said the work was important “because the quality of life is intricately intertwined with a surface and complete transportation system.”
Commissioner Ric Williamson said TGRTA “was always there to help.”
A strong backer for tolling, Williamson asked how many people would be willing to raise the gas tax 40 cents. “We're either going to build toll roads, or we build nothing, or we build very slowly,” he added.
Williamson cited the strong support from Gov. Rick Perry. “This governor decided that if he did nothing else in his tenure, he would set transportation back on a path of growth and modernization for the future of our state.”
“We made a mistake (in the late 1980s) when we took money from transportation,” Williamson added. “If we had not diverted money from transportation, we could have built what we needed.”
Hope Andrade and Ted Houghton were unable to attend. Former Commissioner Robert Nichols resigned from the Commission June 30. (See August 8 Board of Director Report on resignation).
2005 Legislature fine-tunes 2003 transportation legislation
Sen. Kim Brimer of Arlington, a member of the Transportation & Homeland Security Committee, said that the 2005 Legislature devoted its energies to improving the historic transportation legislation passed in 2003.
The bill “provided improvements to procedures we use to build our transportation infrastructure, while increasing protections for landowners, improving contractor procedures, and offering greater financing options and flexibility,” Brimer said.
The Legislature, he said, revisited pass-through tolling, addressed concerns about the Trans-Texas Corridor, prohibited conversion of a highway to tolls unless it had the approval of the county commissioners' court, approved a Rail Relocation Fund (subject to voter approval in November), and created a Commission on Transportation Financing. The commission will review the fuel tax and its efficiency, evaluate expenditures, study rail funding and financing options for other modes.
To TGRTA members, Brimer said “I cherish your knowledge.” And he labeled Texas' Department of Transportation as “the finest in the nation.”
Is this the year for a federal transportation financing bill, finally?
The six-year Surface Transportation Act of 1998 had been extended eight times since 2003 as TGRTA members met July 6-7. The extension would expire July 19.
Yet two knowledgeable speakers were optimistic that agreement was near.
Dan Reagan, Texas Division administrator for the Federal Highway Administration, said that with strongly rumored agreement among congressional conferees and the Bush Administration on the dollar total, passage could happen by Aug. 1.
Coby Chase, director of TxDOT's Legislative Affairs Office, said “they seem to be closer than they've ever been.”
The Senate passed a reauthorization bill calling for $295 billion in spending. The House bill okayed $284 billion. The administration had threatened to veto anything more than $284 billion. Reagan said that the administration and conferees reportedly agreed on $287 billion to break the logjam.
The new bill could increase federal transportation aid coming to Texas from $2.1 billion to $2.9 billion per year, said the FHWA administrator. “Not the silk stocking neighborhood,” he added, “but not slim.”
The legislation would earmark $11 billion for more than 4,000 specific projects across the country. Texas would have 190 projects costing $720 million.
Reagan identified two very important actions under consideration:
1. Creation of a commission to look at transportation funding, and
2. Permission to use the Highway Trust Fund to finance rail relocations.
Rail improvements can benefit highways by reducing congestion, he reminded his audience.
Chase said two significant, contentious items remain - 1) projects earmarked as “high priority” and projects “of national and regional significance” and 2) the distribution formula (Texas has been a chronic donor state, sending more taxes to Washington than it receives in aids).
“We're told we receive 90.5% (the rate of return),” he said, but “that's not true” because not all funds, including discretionary and earmarked, are in the formula-funds pot.
Texas is shooting for a 95% return by 2009.
The Senate bill puts 91% of all funds in the formula pot, with promises to get to 92% by 2009. The House bill lowers the rate of return to 88%.
“It's difficult to change,” Chase said, “but we're not going to stop.”
Current state law allows TxDOT to delegate environmental review, design and construction to a single contractor to ensure streamlining and maximum efficiency, with TxDOT oversight. TxDOT would like a comparable federal law, including the ability to accept unsolicited bids for preliminary private-sector innovations. “The feds allow design-build, but it's very cumbersome,” Chase added.
Texas believes federal limitations on tolling new interstate segments should be lifted. TxDOT prefers the Senate's FAST Lanes program, which grants added flexibility and is geared toward new capacity tolling. This would be desirable for developing the Trans-Texas Corridor, I-69 and other urban-area mobility projects.
The House bill contained an amendment by Texas Congressman Michael Burgess to provide a pro-rata calculation of toll credits - renamed transportation development credits - requested by TxDOT. “The calculation must be amended to allow credit for the portion of a toll-financed project funded with federal dollars,” Chase said.
The Senate was silent on that issue.
“It will be a fight to keep the amendment in the bill,” Chase added.
The Senate bill had a workable version of language permitting tax-exempt private-activity bonds for highways and qualified surface freight-transfer facilities. Texas wants to ensure that the Senate language is retained. The House had killed such provisions.
“To help us streamline project delivery,” said Chase, “Texas should be allowed greater authority to assume USDOT responsibilities for various federal programs.”
The Senate proposed a five-state pilot program to let states assume federal responsibility for environmental review. Texas wants to be part of such a pilot program.
Chase said that urban centers seeking to relocate rail outside of cities as part of a strategy to improve safely and mobility should have access to federal highway dollars. “I would be surprised if we are successful,” he said.
Chase called on TGRTA members to ask Texas congressmen and senators to support a flexible bill, as TxDOT suggests.
“It is my firm belief that if we're given the right tools to do the job, Congress will be impressed with the results five years from now,” Chase concluded.
Reagan, saying that “highway safety is the most important thing I do,” asked TGRTA members to redouble their efforts to improve safety.
Traffic crashes in Texas take 3,500 lives and cause $19.7 billion in economic loss each year.
Leading causes of fatalities, he said, are driving too fast, alcohol and not paying attention. “In this age of multitasking, driving needs 100% attention,” he said.
If each person educated one person about the causes of traffic deaths, he said, the benefits would be incalculable.
At meeting's end, TGRTA passed a resolution “applauding the strenuous efforts of the Texas Majority leader Tom DeLay, a conferee, to bolster the rate of return to Texas and other donor states, to the highest achievable level” and said that a compromise (over the dollar amount of the bill) is “preferable to an attempted veto override.”
Cintra Zachry getting started on Trans-Texas Corridor
TGRTA, meet Cintra Zachry, the new-kid-on-the-block combination of companies that will build the Oklahoma-to-Mexico Trans-Texas Corridor (TTC).
Cintra is the Spanish group of engineering, construction and financial firms building transportation facilities in six countries; Zachry is Texas' second largest contractor, which is partnering with Cintra on the innovative corridor.
Phillip Russell, director of the Texas Turnpike Authority Division, said the contract TxDOT signed with Cintra Zachry March 11 was “landmark.” It is the umbrella that sets out the legal relationship for the partnership that will bring international private investment into Texas transportation building.
Cintra proposes to invest $6 billion in a toll road between Dallas and San Antonio, and give the state $1.2 billion for additional transportation improvements, and to extend the corridor into the Lower Rio Grande Valley to Mexico. On the ground - east of and generally parallel to I-35 - will be 316 new miles of four-lane divided highways. By 2010 - only five years from now - five projects will be under construction. By 2015, they will be open to traffic, said Ed Pensock, Jr., TxDOT director of turnpike control systems.
Diego Marin, Cintra Zachry's vice president and TCC project manager, said many European countries have experience in the paradigm shift toward public private partnerships. They are, he said, “the most efficient way to manage each type of risk.”
Such partnerships lead to cost savings, access to new financing sources, and acceleration of priority projects, Marin claimed.
“Our success will bring other investors to Texas,” Marin said.
The 315 miles of toll road will be built, he added, “without any public dollar.”
Marin said Cintra and Zachry share the common goal of bringing efficient, high-quality transportation.
Pensock said TxDOT's goal for the Comprehensive Development Agreement was to procure a long-term strategic partner, to minimize state tax revenue contributions and maximize private-sector commitments.
The Draft Environmental Impact Study will be finished by late fall or winter 2005, he said. It will be discussed at a November public meeting that follows 120 other meetings. Some 40 meetings will help identify 10-mile-wide bands in which both highway and rail facilities can be placed.
TxDOT also is studying connections to the TTC and improvements to connecting existing highways. He said the TCC will be “akin to rural Interstates” with interchanges every four to six miles.
Highway 130, the toll road between Georgetown and Sequin that bypasses Austin, is not part of the TCC, said Pensock, but will affect its location and connections.
Pensock said the Trans-Texas Corridor also will include facilities for the proposed I-69 from Mexico to northeast Texas. A series of 37 public meetings on TTC-69 was set to start in July 2005.
Rail Relocation Fund up for voter approval this fall
Investing in rail may be “the best buy for the taxpayers' buck” to solve transportation problems, Scott Moore of Union Pacific Railroad told TGRTA members.
Moore, who is general manager for public partnerships, said Union Pacific believes there are many opportunities to work with public agencies on mutually-beneficial projects. It's important, he said, to develop win-win projects for both the public and private sectors.
He applauded Texas for visionary thinking in supporting rail improvements.
Mario Medina, TxDOT's multimodal section director, said the Legislature this year created a Rail Relocation and Improvement Fund, which will be on the ballot this fall for voter approval.
He said that truck-to-rail diversion is “a good thing from the highway standpoint.”
The American Association of State Highway and Transportation Officials has said that the aggressive use of public-private partnerships for rail projects could divert 600 million tons of freight each year.
HB 3588 authorized TxDOT to develop rail facilities, including the use of pass-through fares. Similar to pass-through tolling of highways, the local entity could build a project and, based on freight movement, TxDOT would reimburse the entity.
Mario said the Trans-Texas Corridor provides an ideal opportunity to explore rail relocation projects, including the use of private investment.
TxDOT currently is doing a freight mobility study in San Antonio and Austin, and acquiring data for a similar study in Houston.
Airlines aren't flying so high now
The airline industry faces a host of challenges, an American Airlines official told TGRTA, among them weak demand for seats, high fuel prices, security and a high federal tax burden.
“It will take a lot of hard work to get through this period,” said Dan Hagan, American Airlines' managing director for corporate affairs. Hagan is a member of TGR's Executive Committee.
Talking about his airline in particular, noting that it was “virtually on the courthouse steps for bankruptcy in 2003,” Hagan said it cannot stand still and be a viable part of the U. S. airline business.
“If we don't do even better than we do today, we will not be as healthy as we are today and will not be part of the industry in 10 years,” said Hagan.
He had some good news on the business:
--The airline industry is remarkably safe (one fatal accident among 10.5 million departures in 2004);
--Air travel is incredibly convenient (one-stop service to virtually the world); and
--Air travel is a bargain (67% of all tickets cost $300 or less last year, compared with 53% in 2000).
Hagan's not-so-good news:
--With demand dramatically down since 2001 and 9/11, carriers are reluctant to order new aircraft.
--Airfares have not kept pace with inflation since 1979, partly the result of deregulation.
--Fuel costs now are American's second largest expense, and it is virtually impossible for airlines to increase prices to compensate for the fuel hikes.
--You need a strong balance sheet and ready cash to hedge on fuel, and only Southwest Airlines is able to do that.
--Airlines use tankering - loading up more fuel at airports where it is cheaper - in the effort to save money on fuel.
--Security concerns weakened demand and, for most purposes, airlines are not able to pass along in ticket prices the increased costs of homeland security.
--Taxes now account for 20% of the ticket price, compared with 13% in 1992.
--Since 2000, the breakeven load factor has been higher than actual loads. Load factors ranged from 79% to 84%, while actual loads went from 70% to 76%. “It's difficult to operate an airline with load factors this high,” Hagan said.
The industry is getting more efficient and getting more production with each employee, he added.
American Airlines is meeting with some success, Hagan said. Excluding fuel, the cost per available seat-mile was down 3% in the first quarter.
Smaller jets, carrying 44 to 75 persons, have met strong customer satisfaction.
Internationally, American added service to Dublin and Shannon, with better service this fall to Osaka, Japan and Buenos Aires and next year to Shanghai.
David Fulton, director of TxDOT's Aviation Division, traced the history of state involvement in aviation, noting that airports were in a “bad state of repairs” when TxDOT was formed in 1991 and aviation became part of it. “Things started to change when TxDOT was formed,” he said.
His division now provides $65 million to state airports.
Texans pave the way for Interstate highways
Texas has had many leaders with the vision and foresight to recognize than transportation is important to the state, an official of the Texas Transportation Institute (TTI) said.
In a presentation on the history and impact of the Interstate Highway System, Dennis Christianson, deputy director of TTI at Texas A & M University, identified a long list of Texans who played a role, nationally as well as in Texas, in the Interstate System's development:
--Frank Turner, an A & M graduate, longtime director of the U.S. Bureau of Public Roads, recognized as “the father of the Interstate Highway System;”
--Dwight Eisenhower, born in Denison, who spearheaded the move for a cross-country system of highways and approved the Interstate in 1956;
--Lyndon Johnson and Sam Rayburn, who led the effort in Congress;
--Dewitt Greer, TxDOT leader under whom Texas built 60% of its allotted miles by the time he retired in 1967;
--J. C. Dingwall, under whose leadership the Interstate System was declared complete in the 1900s; and
--Lady Bird Johnson, main advocate for the Highway Beautification Act of 1965.
Christianson noted that Texas has 3,233 miles of Interstate highways, more than any other state.
Road Hands honored
Four longtime Texas transportation supporters were honored at the TGRTA luncheon July 6 as the newest of TxDOT's Road Hands - citizens who have given their time, energy and vision to help improve transportation in their communities.
They were:
--Roger H. Hord, president of the West Houston Association who championed the Katy Freeway and development of I-69, among many notable causes;
--Jack Hatchell, longtime transportation supporter in the Dallas area, Collin County Commissioner, chairman of the North Central Texas Council of Governments' Regional Transportation Council, and chairman of the Plano Traffic Safety Support Commission;
--Charles E. Powell, a leader known for his dedication to air and highway transportation in San Angelo, including his commitment to the creation of the Air Traffic Control Tower Grant Program; and
--Richard P. LeBlanc, Jr., who worked closely on transportation with TxDOT during his 18 years as Jefferson County judge.
The luncheon also honored all of the 198 Road Hands named to date.